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Draft Budget boost for social housing, housing support and building safety

Investment in affordable and social housing will grow to £200 million next year, stimulating jobs and training while providing 3,500 additional new homes, according to the plans unveiled by finance minister Rebecca Evans on Monday.

The plans are part of a draft Welsh Budget she says will protect the economy, build a greener future and create change for a more equal future.

The detailed plans show that there will be an extra £36.8 million for social housing and an extra £40 million for the Housing Support Grant in 2021/22.

Social housing investment will be supported by a 1% increase in the higher residential rates of Land Transaction Tax. Raising £13 million, Mr Evans said this would mean moderately higher taxes paid on the purchase of additional properties, such as second homes and buy to let investments, will support new social housing and jobs to help Wales recover.

A targeted tax reduction will also help businesses recovering from the worst of the pandemic. Most businesses purchasing non-residential properties costing less than £225,000 won’t pay any Land Transaction Tax, as the threshold is raised by 50%. Together these changes will generate around £13 million per year for investment in social housing priorities.

Homelessness Prevention Grant will rise by £4 million to £21.9 million in 2021/22 while the £40 million increase in Housing Support Grant is presented as building on temporary measures during the pandemic to ‘deliver transformational change to achieve our aim of precenting homelessness’.

There is also extra money for building safety, with Welsh Government saying: ‘We remain clearly of the view that individual leaseholders should not have to pay for defects and deficiencies in build quality where there is a clear failure to build to standards, and we will continue to press developers to meet their moral obligations and remediate these buildings.’

This will amount  to £32 million in 2021/22 (£20 million general capital and £12 million financial transactions capital) to  help address building safety concerns. The draft Budget says ‘this investment will provide a solid foundation through remediating building defects, and supporting the installation of sprinklers and evacuation alert systems in a number of affected high rise buildings’.

Finance Minister Rebecca Evans said:

‘As we plan for our first steps beyond the pandemic, this budget is designed to protect health and our economy, build a greener future and create change for a more prosperous, more equal, and a greener Wales.

‘Despite the most challenging circumstances we have ever faced as a government, I am proud to announce a budget that delivers on our values and provides sound foundations for the next administration.

‘While like for like funding per person in Wales remains below 2010 levels, our priorities will steer a course for stability, protecting what matters most and creating the change that is essential to a good recovery.’

Reaction coming in from across the Welsh housing sector shows a positive response to the draft Budget.

In addition to the measures above, the Chartered Institute of Housing Cymru highlighted a new phase of Help to Buy to be supported with £74 million, an additional £20 million to invest in measures that reduce fuel poverty and £5 million to support town centre regeneration, including repurposing commercial buildings as homes

Capital support for local authorities has also been maintained at a level of £198m, which it says ensures that local authorities are able to continue their focus on housing, decarbonisation and economic recovery.

Matt Dicks, national director at CIH Cymru, said:

‘A focus on “building” in today’s draft Welsh Government budget for 2021-2022 is strongly welcome in what we recognise as a budget full of difficult decisions. Additional investment in social housing, ending homelessness and the environment will in practice help deliver the homes Wales sorely needs to ensure that everyone has access to a safe, affordable and accessible place to call home.

‘The housing crisis existed long before Covid-19. Whilst the pandemic has brought into sharp focus the impact of both having and not having access to an adequate home, we must ensure that the momentum that will be created by the investments outlined today act as a starting point for supporting the sector over the course of the coming years.’

Stuart Ropke, chief executive at Community Housing Cymru, said:

‘In a year when the importance of home has been highlighted more than ever, we are delighted to see £200 million of capital investment in new homes announced today. It is nearly three times the amount committed to social housing in 2016, and a reflection of the increased priority given to social housing in Wales over this Senedd term.

‘The increase of £40million for the Housing Support Grant is also welcome news. This will allow housing associations and support providers to continue providing essential services to tenants and support people out of homelessness, which was vital throughout the pandemic.

Combined, these investments give the housing sector a strong platform to build towards the ambitions set out in our Home manifesto. Ahead of the Senedd Elections next year, we need to see all parties commit to build on this level of investment, to support the construction of 20,000 social homes over the next five years that are energy efficient and affordable, supporting jobs, and improving the nation’s health.’

Cymorth Cymru welcomed the moves on housing support and homelessness funding and social housing grant after calling for significant increases in funding to build on work during the pandemic.

Director Katie Dalton said:

‘We are extremely pleased to see significant increases for the Housing Support Grant and social housing in the Welsh Government’s Draft Budget for 2021/22.

‘Over the past nine months homelessness, housing and support services have been at the forefront of efforts to protect people from COVID-19, providing over 4,000 people with emergency accommodation and support, as well as preventing thousands more from becoming homeless.

‘It is absolutely essential that we build on these extraordinary efforts and make progress towards our shared goal of ending homelessness in Wales.

‘This budget provides a firm foundation for this – and we hope that all political parties commit to sustained investment in their upcoming election manifestos.’


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